As the US–Israel–Iran conflict enters its second week, Kharg Island has emerged as a critical strategic flashpoint. Reports indicate that US President Donald Trump is weighing options that include striking the island, a move analysts say could significantly increase pressure on Tehran while also risking major disruption to global energy markets.
Located roughly 25 kilometres off Iran’s coast near Bushehr province, Kharg Island handles close to 90 percent of Iran’s crude oil exports. The island’s storage tanks, pipelines and tanker-loading terminals make it the backbone of Iran’s oil trade and a key revenue source for the Islamic Revolutionary Guard Corps. Because oil income underpins both state finances and military operations, disabling the hub could severely restrict Tehran’s economic capacity.
Security analysts say that targeting Kharg would represent a major escalation beyond conventional airstrikes, directly affecting Iran’s primary financial lifeline. However, the island’s central role in global supply chains makes it an extremely sensitive target. Any large-scale disruption could push international oil prices sharply higher and unsettle fuel markets worldwide.
Former Pentagon adviser Michael Rubin said an attack on Kharg could weaken Iran’s ability to fund its military operations and maintain domestic control. He noted that the island’s strategic significance has been discussed among US policymakers, though it remains unclear how far deliberations have progressed within top decision-making circles.
Iran’s economy relies heavily on oil revenues, and Kharg serves as the country’s main export terminal in the Persian Gulf. In the weeks leading up to the current conflict, Iran reportedly increased production routed through the facility to nearly four million barrels per day, far above its usual baseline, underscoring its financial importance.
Despite Israeli strikes on other Iranian fuel depots, Kharg Island has not been targeted so far. Historically, the island has long been viewed by adversaries as one of Iran’s most vulnerable strategic assets. During the 1979 hostage crisis, US officials considered seizing it for leverage but decided against the move. In the 1980s, while other offshore facilities were attacked, Kharg avoided direct US strikes. The island was heavily damaged during the Iran–Iraq War but was later rebuilt and returned to full operations.
Israeli opposition leader Yair Lapid has argued that striking Kharg’s oil infrastructure could severely damage Iran’s economy. Tehran has warned that any such action would trigger retaliation against energy facilities across the region.
Energy analysts caution that hitting the island could sharply raise global oil prices. With crude already trading at elevated levels, experts estimate that a major disruption at Kharg could add around $10 per barrel, increasing inflationary pressure across international markets.
Experts also warn of long-term consequences. Large-scale destruction of oil infrastructure could impair Iran’s economy for years, making recovery difficult even under a future government and potentially affecting broader regional stability.
One reason Kharg has not been targeted yet is that such an operation would likely require US approval due to the risk of significant escalation. Reports indicate differences between Washington and Tel Aviv over the scale of recent strikes on Iranian energy infrastructure. Domestic political concerns in the US, including rising fuel prices, are also influencing strategic decisions.
Alternative options reportedly examined include seizing the island, disabling export systems, or conducting limited operations against other strategic assets. When asked about potential actions, President Trump said all options remain under consideration.
For now, Kharg Island remains a pivotal but untouched node in the conflict, a small territory whose oil infrastructure could influence both the direction of the war and the stability of global energy markets.
